If you are lucky enough to have $3,000 to invest and want some exposure to the energy sector, then it could be worth considering the ASX energy shares named below.
Here's why they could be top long term options for investors according to analysts:
Image source: Getty Images
Boss Energy Ltd (ASX: BOE)
The first ASX energy share that could be a buy is Boss Energy. It is a multi-mine uranium producer with the 100% owned Honeymoon project in South Australia and 30% ownership in the Alta Mesa project in South Texas.
Bell Potter is positive on the company and thinks that its shares are undervalued at current levels and deserve a re-rating. The broker said:
We said previously that a successful 2QFY25 would warrant a re-rate in BOE given the valuation vs peers, we believe it is now well and truly warranted. The short interest of ~19% and average daily volume creates a difficult scenario for shorts attempting to close out their positions, and thus we think BOE could swiftly re-rate over the near-term.
Bell Potter has a buy rating and $4.90 price target on its shares.
Karoon Energy Ltd (ASX: KAR)
A second ASX energy share that could be a top buy with your $3,000 right now is Karoon Energy.
It is an international oil and gas exploration and production company with assets in Brazil, the United States, and Australia. Karoon Energy has two key producing assets – the Bauna Project in the Santos Basin, Brazil and the Who Dat assets in the Gulf of Mexico, USA.
Goldman Sachs believes it would be a great pick for investors right now due to its positive growth outlook and cheap valuation. It said:
KAR is trading at a ~35% discount to our risked NAV, which we feel does not reflect the value of producing assets and the potential Neon development, where our unrisked NAV including 100% of Neon is A$3.34/sh. [..]. Trading on a ~9% FCF yield over 2025E supported by our expectations for oil prices to remain stable over the near term, where KAR offers unique exposure to oil prices within the Australian Energy sector and is trading on a 5% 2025E dividend yield.
Goldman has a buy rating and $2.08 price target on its shares.
Woodside Energy Group Ltd (ASX: WDS)
A third ASX energy share that could be a top option for a $3,000 investment is Woodside Energy.
It is a global energy giant that provides the energy that the world needs to heat and cool homes, keep lights on, and support industry.
Morgans is a big fan of the company and believes its shares are being undervalued by the market. It said:
The tide is certainly out in terms of investor sentiment on WDS. Despite Brent oil trading in line with our long-term forecast, WDS' share price implies a near cycle-low oil price level. We do not see this as capable of being explained by WDS' growth profile (comfortably funded) or risks around non-core assets such as Browse
While the share price performance has been disappointing, supported by a strong balance sheet and high margins, we see WDS investors as capable of being patient. Investment view: We maintain an ADD recommendation believing WDS offers attractive long-term value.
Morgans has an add rating and $33.00 price target on its shares.
